Chan Sek Keong J:

[1] This was an appeal by the plaintiff against the decision of the registrar giving unconditional leave to the defendant to defend the plaintiff's claim which was founded on a friendly loan. After hearing submissions from counsel for both parties, I came to the conclusion that this was a clear case where the defendant had no defence. But because the registrar had misunderstood the law in relation to a claim of a type that frequently arose in the subordinate court, I said I would give my reasons for allowing the appeal.

[2] The following facts were admitted by the defendant. The plaintiff was a housewife. The defendant was a business-woman. They were old friends, their friendship going back to 1965. The have been living in the same block of flats since mid-1982. The plaintiff gave loans to the defendant at the latter's request from time to time and against her post-dated cheques because of their friendship. The plaintiff did not ask for or stipulate any amount of interest, but the defendant paid interest on these loans at her own initiative at rates decided by her. The rates of interest varied from time to time and from loan to loan. The plaintiff accepted t